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Porto Seguro to launch 5% buyback program

Porto Seguro SA plans to buy back as much as 5% of its outstanding common stock, the company said in a Feb. 1 filing.

The program is aimed at increasing share value without reducing capital stock, Porto Seguro said. There are currently 94,351,140 common shares outstanding.

The company said the buyback will be financed out of profit reserves, which totaled 3.79 billion reais as of Sept. 30, 2016.

With 849 million Brazilian reais in the company's cash and cash equivalents account, credit obligations and mandatory dividend payments should not be affected, Porto Seguro said.

The buyback of up to 5 million common shares will be open for up to a year starting Feb. 23, the Brazilian insurer said.

Itaú Corretora de Valores SA will be the financial intermediary for the program.

As of Feb. 2, US$1 was equivalent to 3.16 Brazilian reais.